Brian Cannan: I'm here today with Greg Jemmeson from Jemmeson Fisher Solicitors and Accountants. Good afternoon Greg.
Greg Jemmeson: Hi Brian.
Brian: Our subject today is about confidential information and how it should be handled. Talk to me about confidential information.
Greg: Look Brian, there's a lot of confidential information in a real estate office but particularly client lists, databases, the rent roll and what employees, sales people and property managers need to know is that that's highly confidential and very valuable information that belongs to the business and not to the individual employee. So essentially what we're saying here is that a salesperson for example may be out contacting people bringing in new business and that new business they bring in doesn't personally belong to them, it belongs to the business, so by being put in the position of becoming a property manager or a salesperson that employee is put in a position with the ability to meet people and they're given the tools to meet those people but essentially the ownership of the information and that database belongs to the business at all times.
Brian: Yes so if you ever sign someone up on an agency agreement and you're signing up on behalf of the business so obviously the business owns that information.
Greg: That's correct and what employees have to understand is this that there are serious consequences if they leave that business and then start contacting all those former clients of the business now most standard employment agreements in New South Wales have a restraint provision and they're a cascading restraint which you would see when you sign the employment agreement it'll say you can't work for six months, 12 months, two years or one kilometre, three kilometres, ten kilometres. Now in the past a lot of solicitors would have said that those types of restraints are unenforceable over the last two years the Supreme Court in New South Wales has now been upholding more and more of these types of restraints and putting in place an injunction where the employee cannot work for a set period of time. Examples where they take forward a copy of the database to themselves before they leave, they use testimonials from their previous employer or for example they contact the previous clientele particularly in the case of rent roll and solicit them and trying to attract them over to their new business even if the restraint is not successful you're looking at defending a case like this between 60 and 120 thousand dollars which an employee doesn't want to have to do.
Brian: No, wow so really understand the contract that you're signing when you're being employed and you're going to sign that contract make sure you read all the terms and conditions and understand them.
Greg: That is correct, very much so.
Brian: Greg thank you very much and that's very good information for people when they're being employed.
© Think Real Estate 2019